With its geopolitical significance, rich energy resources, and historical depth, Iran has long been a critical actor in international relations. However, the country has recently faced deep economic and energy crises. While external sanctions are a primary cause, domestic policies have further exacerbated the situation. As economic challenges intensify, the Bazaar, prominent in Iran’s history, has been profoundly affected by these crises.
Historically, the Bazaar has played a central role in Iran’s economic and political landscape. Beyond being a trade hub, it has also been a focal point for social solidarity and political movements. Since the Safavid period, the Bazaar has been the heart of commerce, actively participating in constitutional movements and revolutionary processes in the 19th and 20th centuries. Notably, it transformed its economic power into political influence during the 1979 Revolution. Today, however, mounting financial pressures and sanctions are weakening this traditional role, causing shifts in social dynamics.
Although the current economic challenges differ from those preceding the 1979 Revolution, there are notable parallels in the societal impact of economic hardship and impoverishment. Before the revolution, the Shah’s economic reforms exacerbated income inequality, accelerated urbanisation, and placed economic strain on traditional trading classes and Bazaar artisans. Similarly, today’s economic decline is driven by US and European sanctions, mismanagement, domestic political uncertainties, and expenditures on regional conflicts. As a result, Iran’s economy continues to deteriorate, further challenging the Bazaar’s historical influence and reshaping the country’s social fabric.
The Pre-1979 Economic Crisis and the Role of the Bazaar
The White Revolution policies implemented under the Shah aimed to modernise the Iranian economy but led to significant social and economic inequalities. Rapid industrialisation and large-scale state-sponsored projects rendered traditional artisans and traders uncompetitive. Additionally, rising imports and reduced subsidies to the agricultural sector placed small-scale producers and traders in a difficult position.
Increasingly marginalised by the Shah’s economic policies, the Bazaar allied itself with the mullahs (clerics) during the revolution, becoming a crucial centre of resistance against the regime. The merchants’ financial support and close ties with the working class were among the factors that fuelled the 1979 Revolution. However, in the post-revolutionary period, the relationship between the Bazaar and the new administration gradually evolved.
Economic Crisis and the Bazaar
The Iranian economy is currently grappling with serious structural challenges. The US policy of maximum pressure, coupled with European sanctions, has severely restricted the country’s oil exports, triggering a currency crisis and soaring inflation. The Iranian Rial has depreciated rapidly, causing sharp increases in the prices of basic consumer goods and a decline in the population’s purchasing power. This situation has directly impacted Bazaar artisans, particularly those who rely on trade for their livelihood.
In the early years after the revolution, the new religious regime continued to view the Bazaar as an important economic and political ally. Bazaar shopkeepers had been pivotal in supporting anti-regime movements during the 1979 Revolution, forging a strong alliance with the emerging leadership. However, significantly since the late 1980s, the Islamic Revolutionary Guard Corps (IRGC) grew increasingly influential in the Iranian economy. As state control expanded due to the war economy and ongoing sanctions, IRGC-affiliated companies and foundations took on a more significant role in economic activities. Traditional Bazaar merchants struggled to maintain their economic power while new state-backed economic elites rose to prominence.
The Revolutionary Guards have become one of the most influential actors in the Iranian economy, wielding significant influence across key sectors such as construction, energy, telecommunications, and finance. The IRGC controls many of Iran’s oil revenues, which are not transparently reflected in public spending. Moreover, Iran’s financial support for militias and proxies abroad — such as those in Iraq, Lebanon, and Syria (previously)— drains economic resources and worsens existing problems. This has weakened the Bazaar’s role, once considered the economic backbone of the regime, and significantly diminished the influence of traders.
Bazaar shopkeepers are facing immense difficulties due to import bans and rising taxes. Exchange rate fluctuations and challenges in sourcing raw materials have made trade increasingly difficult, while uncertainty surrounding the government’s economic policies has eroded shopkeepers’ trust in the state. The traditional alliance with the religious leadership, established after the revolution, is weakening as economic hardships mount, and Bazaar shopkeepers are becoming increasingly critical of the government.
Is the Regime-Bazaar Alliance Cracking?
The longstanding cooperation between the Bazaar and the regime has been based mainly on mutual economic and political interests. However, as the economic crisis deepens, this alliance is being called into question. Historically, the Bazaar played a pivotal role in organising opposition to the Shah during the revolutionary process — and now, it appears to be reconsidering its support for the current regime. Rising unemployment, trade restrictions, and market instability threaten artisans’ economic independence, leading to discontent within the Bazaar.
In recent years, the Bazaar’s discontent has occasionally manifested in strikes and protests. Notably, the Trump administration’s unilateral withdrawal from the nuclear deal in 2018 and the subsequent imposition of new sanctions directly impacted Iran’s economy, sparking protests in 2018 and 2019. Tehran Bazaar, which played a crucial role during the revolution, also participated in these demonstrations. Similarly, during the protests over the death of Mahsa Amini, who was detained in 2022, many Bazaar shopkeepers expressed passive resistance by closing their shops.
More recently, on December 29, 2024, Bazaar shopkeepers launched a strike and staged widespread protests in response to the surging exchange rate and soaring inflation. All these events indicate that the once-strong relationship of trust between the regime and the shopkeepers has weakened, with mounting economic pressures fuelling political discontent. However, despite these expressions of frustration, the protests have not yet evolved into a well-organisedsocial opposition capable of posing a real threat to the system.
Can the Bazaar Become a New Centre of Revolt?
As in pre-1979, growing societal discontent driven by the economic crisis could pave the way for a new social movement. However, today’s political conditions differ slightly from before the 1979 Revolution. The government’s repressive mechanisms are now far more sophisticated, and the security apparatus is quick to suppress opposition movements in their early stages. While the Bazaar’s frustration is evident, whether it can once again emerge as a central force in a broader revolt remains uncertain.
However, as the economic crisis deepens and business conditions grow increasingly challenging, the likelihood of Bazaar artisans adopting an anti-government stance rises. If the Iranian government fails to implement meaningful economic reforms and address the shopkeepers’ demands, the Bazaar could again take on its historical role as a vanguard for change.
For a successful movement to emerge, akin to what transpired in 1979, Bazaar shopkeepers must build strong alliances with the current political opposition. Additionally, for the Bazaar to spearhead a new push for change, a robust opposition movement must first take shape, led by a charismatic and effective leader. In the 1979 Revolution, the presence of a figure like Khomeini played a crucial role in uniting various factions and guiding the uprising. Today, however, Iran’s opposition’s fragmented and disorganised nature weakens the chances of the Bazaar leading a transformative movement.
Moreover, in contemporary Iran, social opposition is primarily driven by younger generations, whereas Bazaar shopkeepers tend to be more pragmatic, often avoiding direct political confrontation. As a result, it seems less likely that the Bazaar would once again take the lead in a mass uprising as it did before 1979.
If the Iranian government fails to implement economic reforms and continues to ignore the demands of the commercial sector, the Bazaar could again emerge as a centre of opposition to the regime. As economic hardships intensify, the Bazaar’s quiet discontent could evolve into open opposition, potentially marking a significant turning point in Iranian politics. However, in today’s Iran, the increasing strength of state repression and the absence of a unified opposition force the Bazaar to act with greater caution. The regime has taken drastic measures to eliminate real and perceived threats, striving to maintain the status quo despite the ongoing economic crises.
To address its current economic challenges, Iran must undertake structural reforms. First and foremost, engaging in diplomatic negotiations with the US and Europe could pave the way for reintegration into global markets through sanctions relief. In this context, reviving nuclear talks and lifting restrictions on Iran’s energy exports would be crucial steps toward fostering economic growth. Reducing the Revolutionary Guards’ dominance over the economy, empowering the private sector, and improving the investment climate could help create a more sustainable economic structure.
However, given the regime’s deeply rooted ideological and security-driven policies, implementing these reforms will likely face significant political and bureaucratic obstacles. Without meaningful change, the cycle of economic hardship and political discontent is bound to persist, keeping Iran’s future uncertain.
